In
the FCC’s Notice of Proposed
Rulemaking
for “accelerating wireline broadband deployment by removing barriers to
infrastructure investment,” the Commission proposed an OTMR policy, which
ensures that attachment poles are prepared for the installation of new
broadband infrastructure. In many municipalities, when a provider wishes to
attach equipment to a pole, providers currently attached to that pole must
approve the plans and hire contractors to carry out the work of moving existing
attachments to make room for the new ones. The current process creates
unnecessary costs among multiple providers and multiple contractors. With an OTMR
policy, a single, pre-approved contractor is able to perform all of the
necessary attachments, significantly reducing the costs of broadband deployment.

The
CMA Strategy Consulting report analyzes the potential impacts of a nationwide OTMR
policy on the deployments of fiber-to-the-premise (FTTP) and 5G wireless
broadband. A nationwide OTMR policy would result in an additional 8.3 million
premises passed by fiber providers, which corresponds to $12.6 billion in
capital expenditures invested by fiber providers. It also would result in an
additional 5.9 million premises passed by 5G wireless providers, which
corresponds to $8.8 billion in capital expenditures invested by 5G wireless
providers.

Importantly,
twenty states and the District of Columbia are certified for “reverse
preemption,” which means these states are not required to adopt FCC regulations
regarding pole attachments, potentially limiting the positive impacts of an
OTMR policy. However, if an OTMR policy is adopted and these states choose not
to implement it, there still would be an additional 5.1 million premises passed
by fiber, which corresponds to $7.7 billion in capital expenditures invested by
fiber providers. And for 5G technology, there would be an additional 3.7
million premises passed, which corresponds to $5.4 billion in capital
expenditures invested by 5G wireless providers.

The
report also estimates the impact of higher-than-average municipality-imposed
fees on nationwide 5G deployment if those above-average fees were to become the
national average.

In
many cases, the annual pole attachment fee for small cells, which are the
infrastructure supporting deployment of 5G technology, is about $20 per pole. But
some municipalities charge annual fees of $500 to $37,000 per pole. Applying a
nationwide fee of $12,000 annually per pole would result in 28.2 million fewer
premises passed by 5G technology, which corresponds to $37.9 billion in foregone
network investment.

Some
municipalities require application fees for pole attachments that are separate
from the annual fees. These application fees range from $500 to $15,000 per
pole. A nationwide application fee of $500 per pole would result in 7.9 million
fewer premises passed by 5G technology, which corresponds to $11.6 billion in
foregone network investment.

Lastly,
while gross revenue fees are more common in the cable market, some
municipalities have attempted to charge broadband providers fees of up to 5% of
gross revenues for access to municipally owned rights-of-ways. If this were the
national standard, there would be 9.4 million fewer premises passed by 5G technology,
which corresponds to $13.6 billion in foregone network investment.

This
report by CMA Strategy Consulting provides two very important takeaways. First,
a nationwide OTMR policy would lead to an additional $7.7 to $12.6 billion in
capital expenditures invested by fiber providers and an additional $5.4 to $8.8
billion in capital expenditures invested by 5G wireless providers, depending on
how many states choose to adopt the policy. Secondly, the report highlights an
unfortunate trend by some municipalities to charge excessive fees that surely
will hinder deployment of advanced broadband networks and services.

The
CMA report demonstrates that a nationwide OTMR policy would further the rapid
deployment of next-generation broadband services. By significantly lowering the
costs of deployment, a nationwide OTMR policy would create more competition,
investment, and innovation, all benefitting America’s broadband consumers.